Tue, Apr 17, 2018 - Page 11 News List

Tencent-backed app said to seek US$4 billion IPO

Bloomberg

Yet another Chinese technology company is headed for an initial public offering (IPO).

Meilishuo (美麗說), the online fashion retailer backed by Tencent Holdings Ltd (騰訊), is in talks with several investment banks about a US IPO that could value the start-up at about US$4 billion, people familiar with the matter said.

The women-focused online retailer hosted a bake-off to discuss its IPO prospects with potential advisers and underwriters, the people said, asking not to be identified talking about private negotiations.

Meilishuo, which merged with rival Mogujie (蘑菇街) in 2016 to form a company with US$3 billion in sales, was said to have been valued at US$3 billion at the time of that deal.

The company, whose name means “Beauty Talk,” is one of the more popular fashion and cosmetics retailers online, a niche it has clung to despite the dominance of Alibaba Group Holding Ltd (阿里巴巴) and JD.com Inc (京東商城).

Meilishuo’s envisioned US$4 billion valuation is an initial target and could change if a deal proceeds, the people said.

It is one in a growing wave of Chinese technology companies looking to sell their shares to the public.

Smartphone maker Xiaomi Corp (小米) is seeking a valuation of as much as US$100 billion in a much-anticipated IPO, people familiar with the matter have said, while Meituan Dianping (美團點評), a Chinese food review and delivery giant also backed by Tencent, has begun discussions about a Hong Kong IPO at a valuation of at least US$60 billion.

“Tencent wants to develop e-commerce via its partners, so Meilishuo could get a lot of resources and help,” Hong Kong-based RHB Research Institute Sdn analyst Li Yujie (李玉潔) said. “It still depends on how the overall market performs, but e-commerce sector-wise, it would be a good year to fetch a good valuation.”

Meilishuo, which did not respond to requests for comment, was said to have considered a US listing as early as two years ago.

Most of China’s largest technology firms have picked New York for IPOs, seeking the wide investor base and higher international profile that a US listing confers.

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